Pepsico and “Capitalism with a Conscience”

Last weekend I went to San Diego for the BlogHer 2011 conference. Attended by about 3,600 Women Who Blog (and me), it was quite different, and much larger, than the fantastic BlogHer Food conferences I’ve attended (and spoken at). I realized about halfway through the conference that it’s focused on a demographic rather than an interest group, which made for a rather disjointed array of sponsors. Even so, it was a well-run conference with many opportunities to learn, strengthen friendships, and have fun — and for all of that I am grateful.

One highlight was the lunchtime keynote interview with Indra Nooyi, the CEO of Pepsico, the world’s second largest food and beverage business. Not surprisingly, she’s quite impressive. It’s immediately apparent she’s outrageously intelligent, engaging, endearing, and a true leader in business and her own industry.

At the outset of the session, they invited us to send our questions to her via twitter. I lept at the chance, of course, and sent this tweet:

A short while later (and much to my surprise), they actually asked Ms. Nooyi my question. Her answer? “We do.” She then named three of their brands: Quaker, Naked Juice, and Tropicana.

Quaker

Ms. Nooyi claimed that Quaker Oats are “whole, fresh ingredients.” Sure, plain oats are a fantastic ingredient! But that cardboard cylinder of plain, unsweetened oats are usually tucked away on a bottom shelf. The rest of the Quaker product lineup consists of highly-sweetened and highly-processed items.

(But don’t worry, at least they’re quick to point out that these are made without high fructose corn syrup…)

I also came across this product on their website: Quaker Chocolate Chip Breakfast Cookies. Beyond the obvious fact that we shouldn’t be encouraging cookies for breakfast, these are anything but “fresh.” I’ve again bolded the sugars, added flavorings, and preservatives.

Naked Juice

The second product line she mentioned was Naked Juice. Here, I’m in less disagreement: I suppose this is probably nearly as well as a “big food” company can ever hope to do. The ingredient lists are short, and contain mostly fruit, fruit juice, or fruit purée.

I say mostly, because they add “natural flavors,” which are not actually natural. I also want to take a moment to point out that apple juice, which is the first ingredient listed in many Naked Juice beverages, has little or no nutritional value. It’s basically sugar water.

One bottle contains two servings, though it’s highly likely that a person will consume the entire bottle. There’s no fiber at all, which whole fruit would have. Worst of all, each serving contains 26 grams of sugar. Drink the whole bottle (again, that’s likely), and that’s 52 grams of sugar — almost exactly the same amount of sugar per ounce as Pepsi (which has 54 grams per 16 ounces).

Said another way: If someone drinks an entire 16-ounces Naked Juice, they’re getting about three teaspoons more sugar than what they’d get in a 12-ounce can of Pepsi.

Tropicana

Ms. Nooyi’s last example was Tropicana. She pointed out that “it” is 100% juice, not from concentrate, “not boiled and not reconsituted,” and is “fresh from the grove” (whatever that means). Presumably, the “it” in her sentence referred to their flagship, 100% Orange Juice product. It may not be boiled, but it is pasteurized, which immediately makes it completely different than true, fresh-squeezed orange juice.

I take issue with orange juice in general (it’s really just sugar water with vitamin C, something most folks are not lacking) — but let’s look beyond that for a moment.

Shortly after her speech, I was downstairs in the conference lobby. Pepsico had a large Tropicana booth there. They weren’t showcasing 100% Orange Juice. Instead, they were introducing their new Trop 50 product. After being offered a sample (which I declined), I picked up a bottle and looked at the ingredients:

(By the way, even if added vitamins and minerals were a good thing, they don’t add up to much per 8 ounce serving: Most are only 4% to 6% of your day’s recommended intake, and the highest is 10%.)

Once again: Not fresh. Not whole. Not unprocessed.

Gatorade

Although Ms. Nooyi didn’t mention Gatorade in her answer to my question, she did bring it up at another point in the conversation. She referred to it as performance drinks “for athletes.” Yes, Gatorade has been proven to be beneficial to high-endurance and high-performance athletes. We’re talking marathoners, professional sports players, and Olympic Champions. Those kinds of folks.

So why did Pepsico have a Gatorade booth at the BlogHer conference? Remember, this is a conference targeting Women Who Blog (the vast majority of whom are “mommy bloggers”). It’s not a conference for athletes, it’s not about physical fitness, and it’s not about sports.

Even worse: They were showcasing their recently-launched “G Series” line of products. These are three separate products designed to be consumed “before, during, and after practice, training, or competition.”

Drink all of that and you’re getting 420 calories of mostly sugar. It takes about 40 minutes of running (nonstop) to burn that many calories. So if you’re a professional athlete, yes, this make sense. But if you’re a mom who’s trying to help your kid perform well and stay in great shape while playing a soccer game? It’s overkill — and probably won’t help your kid lose any of those extra pounds she’s gained from eating Pepsico’s other products.

Obesity

Early in her interview, Ms. Nooyi said the Obesity epidemic is caused by inactivity: “There’s no question that sedentary lifestyles have caused the obesity crisis to get out of control.”

Here’s where I cry foul! It’s significantly easier to eat 500 fewer calories than to burn the same number of calories through activity. Doesn’t matter if it’s running, walking, yardwork, or shoveling snow, it’s a simple fact. You can eat 500 calories in two minutes. It takes about 45 minutes to an hour of strenuous activity to burn the same number of calories.

Later, she did correctly says that obesity is caused by “a mismatch of the calories in and out,” but again blamed inactivity, not over consumption of calories.

Yes, inactivity is a significant contributing factor to the obesity epidemic. But for her to flat out say it is the primary cause is inaccurate, misleading, and dangerous.

“Capitalism With A Conscience”

One of the cornerstones of Ms. Nooyi’s message was that we need to have “Capitalism with a Conscience.” Wow, that sure sounds great.

If Pepsico truly has a conscience, and should therefore be careful to determine right from wrong, what are they truly doing — not just saying? Take a careful look at Pepsico’s U.S. Brands Shopping List(PDF). Skip the marketing language, the corporate spin, and the pretty colors and characters. Turn the package over, read the ingredients and consider what’s actually in these products.

Are the examples Ms. Nooyi gave us to support her case enough to help her sleep at night? I bet they are. But they sure wouldn’t be if I were in charge.

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For more on this topic:

Snacks for a Fat Planet by John Seabrook, an excellent discussion of Pepsico’s “Better For You” focus in the May 16, 2011 issue of The New Yorker.

Interesting questions. Pepsi dominates this space, and they do similar booths at SXSW, although…they don’t try to sell that crowd on how healthy Pepsi is, which brings up more questions on how they view this particular demographic.

Sugar water that is orange juice is great for those of us with blood sugar issues and Gatorade is particularly useful for those of us with POTS (a disorder that is characterized by low blood pressure, essentially). So they are not entirely useless, but helpful for some of us.

Such a great post, Andrew. Big Food certainly is infuriating. I don’t get how Naked Juice can claim to include fruit purees, but there isn’t any fiber in the product. Maybe they are pureeing the juice! And the fact that people eat things like those breakfast cookies without ever questioning the ingredients, just because they are made by “wholesome Quaker”, makes me hate marketing and advertising. And that’s what I do for a living!

Just a couple of points. Ms. Nooyi’s point regarding inactivity is correct. Overall, American’s are less active then they were even a decade ago and I am not talking about strenuous physical activity but basic activity – such as walking, lifting, standing, etc. All of that impacts our caloric requirements. Now, of course it is easier to “eat less” than to “move more” but both are necessary for both weight loss and weight management. As for the gatorade product, for some adolescents it is a useful product. Both of my sons are athletes and during their season they burn between 3,000 and 4,000 calories per day so products such as gatorade are definitely useful – it basically provides needed calories without stressing the digestive tract.

At first Ms. Nooyi said, point blank, that inactivity was the primary cause of the obesity epidemic. That is where I take issue. She later softened that statement and said that food intake was also the culprit. Of course weight gain is, in part, caused by reduced activity, and Americans are less active than they used to be. But to say that inactivity is the fundamental cause of the obesity epidemic is simply untrue. (And please don’t misunderstand: I’m completely in favor of increased activity and exercise! It definitely is the other part of the energy-balance equation!) And yes, Gatorade is probably a useful product for your athletic sons. A lot of whole, fresh, unprocessed foods or beverages could be, too. I’m not inherently against Gatorade, but I am against the implication that Gatorade is for people other than athletes. People drink Gatorade because their sports heroes drink it. People… Read more »

Interestingly enough, it was her inactivity / tax speech that got me to walk out of her keynote. And actually almost my whole table walked out mid-way through her speech.

She tried to deflect the soda tax with her comment that the obesity in children isn’t Pepsico’s fault with Frito-Lay and Pepsi but because mandatory PE is no longer around. Hmm, if you tax soda and snacks, could that money go back to schools to reinstate mandatory PE?

She also noted civility. I guess she’s never watched her own Pepsi commercials which can only work by attacking Coke.

To me – there is no “conscience” in capitalism, there is only profit. That doesn’t mean, however, that we can’t have capitalism and predominantly healthy food on the market. We’d have to make it more profitable to make and sell healthy foods, though, which would mean we’d have to stop subsidizing commodity crops, and start subsidizing produce instead.

Much as I try to give the benefit of the doubt companies claiming to have a conscience, none with the track record or financial interests of a Pepsico will ever occupy that space. Some new, smaller companies have made efforts to package and sell healthy foods – never perfect (some are total junk like the what the big players are peddling) but I’d rather support those small companies that remain (here’s hoping Pepsico and others don’t buy them all).

Again Andrew, a superb post. I actually thought of emailing or tweeting you when I read “snacks for a fat planet” (or did I actually do so? can’t remember) in the New Yorker. Fascinating that she was a speaker at BlogHer. Again, you hit all the points that I would question as well. While reading that article, our (hubby and I) jaws dropped many times, in awe of her beliefs. Yes, she’s brilliant (and YOUNG!?!), but why can’t she/they just admit and live with calling these foods unhealthy snack foods? I eat Cheetos occasionally, happily and guilt-free. I’m not going to eat more of them if they’re “healthier”.

Nice article. I’m not inclined to believe that a company like Pepsico is motivated by anything but net revenue. Getting companies like Pepsico to care about producing natural, “good for you” products will come only when the demand of those types of products make it profitable for them to produce. Consumers have to stop consuming the crap they call food and demand real food.

Thanks Darcie. I think Nooyi is probably sincere in her goals of improving their products, and that she believes what she’s saying. But that’s probably irrelevant. Within the framework of a publicly-traded $60 Billion/Year snack-food and sugar-beverage company, I’m not sure even the CEO can make enough change happen.

Great post and interesting discussion on Gatorade (and sports drinks in general). About a year and a half ago I started running. Usually I run 3-5 times per week and I’ve done about 15 races ranging in distance from 4 miles to a full marathon. On runs of 6 miles or less, water is certainly sufficient for me. And typically in races shorter than a 10k, the race officials will have water stations, but not sports drinks. However, when the miles pile up much beyond that, I find I need some nutritional aids or else I will certainly “hit the wall” (basically glycogen depletion); not a good feeling AT ALL. Notably, some professional marathoners will train at a state of glycogen depletion (similar idea as training at altitude), but they will use sports drinks during the races. Others will drink unfizzed soda (which is available at certain Ironman events). Items… Read more »

Just home from vacation, I saved this to read once the unpacking was finished, ditto with the laundry and watering the garden. You just do not disappoint, Andrew – and I have another of your posts to read now. Great work!

Andrew – Just came across this one and recommended it to my facebook friends, only because in the month of vacations and beach trips – I have been having this discussion with many friends and family members. When you are at the beach and you see this children “running around” – they can’t run- with their faces and eyes so helplessly swollen by the CRAP they are consuming you can’t help but get upset. Then you see their mother handing them a gatorade and a pack of pringles and you wish you could scream. People believe what PepsiCo preaches – why shouldn’t they? They are Pepsi after all -and gatorade is for when you sweet. And for cavitys and diabetes too. Your words combat all of the BS. Great work – point made!

Thanks, Aly. I hope I don’t sound “elitist,” but once one’s eyes are opened to what’s really going on, it’s hard not to see the truth. The polarization in our society (Democrat vs. Republican, Rich vs. Poor, Healthy vs. Unhealthy) is only growing.

Either you’re part of the problem or part of the solution, and it sure seems to me that PepsiCo is part of the problem.

Great Post, Andrew! Great arguments. In their defense, I do believe Pepsi tries the “healthier” route moreso than other large companies. However, I think it is difficult to shift your product to “healthy” when actually it’s the consumers that should shift their behavior. It’s a delicate goal to try to shift the product hoping to change consumer behavior. If everything was healthier, it would be more expensive and their key consumer group wouldn’t want it. I still want Doritos and cheetos as a snack/treat…and if they changes the formulas/ingredients they would lose my business for sure. I just don’t think they can or should shift their portfolio so dramatically and quickly…but they do make changes…they do try. And they still have to compete with the other big dogs too. There’s also a big divide in consumer behavior than say 5-7 yrs ago…more health conscious people and then also more people… Read more »

I see what you’re saying, and I have no doubt that Indra Nooyi is sincere in her efforts. However, I don’t believe that a publicly-traded Junk Food company can fundamentally change what they’re doing.

Moreover, I think making junk food marginally “better for you” (which is different than making it “good for you”), particularly through the use of additional chemicals or other technology, is ultimately going to do more harm than good. Stay tuned, I’m going to write more on this soon! 🙂

Andrew, our mutual buddy at Shef’s Kitchen pointed me to this post, as I just read Seabrook’s piece on PepsiCo and mentioned it on Facebook. (I know, I know, late to the table as always…)

More importantly: Good for you for asking the tough questions. Would love to have seen how the CEO responded. And kudos, too, for following up here about the actual ingredients in these “better for you” processed food products.